Crude oil fell for a third day in New York on speculation that the U.S. economic recovery is slowing, reducing fuel demand in the world’s biggest energy- consuming country. Oil slipped as much as 1.6 percent and equities tumbled after an index of preliminary consumer sentiment declined to the lowest level since 2009. Prices retreated yesterday as manufacturing in New York and Pennsylvania dropped, part of a nationwide decline in factory production of 0.4 percent in June. “Oil should be a lot lower than it is,” said Peter Beutel, president of trading advisory company Cameron Hanover Inc. in New Canaan, Connecticut. “We’ve had some very bearish stuff come out about the economy this week.” Crude oil for August delivery slipped 42 cents, or 0.6 percent, to $76.20 a barrel at 10:57 a.m. on the New York Mercantile Exchange. Futures are little changed this week. Brent crude oil for September settlement fell 63 cents, or 0.8 percent, to $75.46 on the London-based ICE Futures Europe exchange. Oil in New York has traded in a range of $8.29 for the past month, from $71.09 to $79.38 a barrel. “We’re stuck in a $70-to-$80 range and looking for a strong signal to exit it in either direction,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “It will take evidence that the recovery is gathering momentum to move us higher, and any signs pointing to continued sluggishness and weak demand will move us lower.” Consumer Sentiment The Thomson Reuters/University of Michigan preliminary consumer sentiment index for July fell to 66.5 from 76 in June. The gauge was projected to fall to 74, according to the median forecast of 61 economists surveyed by Bloomberg News. The report was released at 9:55 a.m. New York time. The Dow Jones Industrial Average declined 1.4 percent to 10,210.48 at 10:58 a.m. The Standard & Poor’s 500 Index slipped 1.6 percent to 1,078.86. The Federal Reserve Bank of New York reported yesterday that its general economic index fell to 5.1 in July from 19.6 the prior month. The Federal Reserve Bank of Philadelphia’s general economic index declined to 5.1 this month, the lowest level since August 2009, from 8 in June. An Energy Department report on July 14 showed that supplies of gasoline and distillate fuel, a category that includes heating oil and diesel, increased last week as crude oil stockpiles dropped. Both crude and fuel stockpiles were above the five-year average for the period. ‘Challenging Environment’ “We’re in a challenging economic environment and we do have plenty of oil,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The recent projections of 2011 demand don’t point to any physical tightness.” Global crude demand will rise by 1.05 million barrels a day, or 1.2 percent, next year to 86.41 million, the Organization of Petroleum Exporting Countries said yesterday in its first assessment for 2011. The Paris-based International Energy Agency forecast that oil usage will advance 1.3 million barrels a day, or 1.6 percent, to 87.8 million in 2011. Crude oil may fall next week, a Bloomberg News survey showed. Thirteen of 33 analysts, or 39 percent, forecast crude will decline through July 23. Twelve respondents, or 36 percent, predicted that futures will be little changed and eight saw an increase. Last week, 53 percent of analysts forecast a gain. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

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